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Blue Ridge Paper Products Posts 3rd Quarter Loss

Nov. 9, 2006 - Blue Ridge Paper Products Inc. today reported a net loss of $2.8 million for the third quarter ended September 30, 2006. This compared to a net income of $2.0 million for the second quarter ended June 30, 2006 and a net loss of $5.4 million for the third quarter ended September 30, 2005. Total net sales for the third quarter ended September 30, 2006 were $145.2 million compared to $144.9 million and $129.8 million in the second quarter ended June 30, 2006 and third quarter ended September 30, 2005, respectively.

Key Business Highlights:

  • Uncoated paper shipments totaled 70,829 tons in the third quarter ended September 30, 2006 compared to 70,220 tons in the second quarter ended June 30, 2006. Average pricing in the third quarter ended September 30, 2006 increased 2.2% compared to the second quarter ended June 30, 2006 and 16.0% when compared to the third quarter ended September 30, 2005. Price increases announced in the first quarter ended March 31, 2006 have been substantially implemented.
  • Packaging segment shipments for the quarter ended September 30, 2006 decreased 3.4 % when compared to the second quarter ended June 30, 2006 and increased 8.2% when compared to the third quarter ended September 30, 2005. Shipments decreased compared to the second quarter ended June 30, 2006 due primarily to the seasonality impact from school milk demand. Pricing for the packaging segment for the third quarter ended September 30, 2006 increased 3.1% over the second quarter ended June 30, 2006.
  • Raw material costs increased in the third quarter ended September 30, 2006 compared to the second quarter ended June 30, 2006 by approximately $0.7 million. This increase was primarily due to increases in the costs of purchased pulp, wood chips and polyethylene. Recent decreases in energy prices have resulted in lower raw material and transportation costs going into the fourth quarter ending December 31, 2006.
  • The Canton mill conducted its annual planned hardwood pulp mill maintenance outage in the third quarter ended September 30, 2006. A corresponding planned annual outage was conducted in the pine pulp mill in the second quarter ended June 30, 2006. The cost of the third quarter outage was approximately $3.7 million greater than the second quarter outage due primarily to additional planned work in the recovery boiler area and a planned maintenance outage of 3.5 days on the paperboard machine, both of which did not occur during the second quarter outage.
  • Through September 30, 2006, the Company incurred due diligence and legal fees totaling $2.1 million associated with a potential growth opportunity. The transaction was not consummated; therefore, these costs were expensed in the third quarter ended September 30, 2006.

Commenting on the quarter, Richard Lozyniak, Chief Executive Officer, stated, "Our net loss was attributable to an extended scheduled mill maintenance outage and $2.1 million in charges related to an acquisition opportunity that did not materialize. We continued to see significantly improved year-over-year financial performance resulting from strong productivity and improving market conditions."

SOURCE: Blue Ridge Paper Products




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